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What is the Real Cost of Natural Gas?

Posted on 22 April 2013 by Jerry

The future effects of energy options, especially natural gas, depend entirely on our assumptions.  Simple computation of cost and break-even appear to show natural gas as a better choice than burning coal.  Improvements in horizontal drilling and hydraulic fracking of underground shale releasing abundant natural gas make this plausible. However, a recent study published in the April 9, 2013 edition of the Proceedings of the National Academy of Sciences (PNAS) casts doubt on this conclusion.

The study looked at the cost effectiveness and ecological attractiveness of natural-gas electricity and natural gas powered vehicles.  The controversial conclusion reached by researchers from Princeton University, Duke University, the Rochester Institute of Technology, and the Environmental Defense Fund was that any computation hinged on the assumption used of leakage levels of methane from natural gas infrastructure.  They held that there was too much conflict in recent reports to decide one way or another.

Reports from research conducted in Colorado and Utah identified very high natural gas leakage rates ranging from 4% to 9%. This is considerably above and discredits the official rate of 2.4% used by the Environmental Protection Agency as it regulates the natural gas industry (see our January 31, 2013 post “Coal to Overtake Oil, Natural Gas is a Questionable Substitute”).  Both of these leakage rates make natural gas a worse energy alternative than coal.

In addition, there are studies that have been undertaken in Australia that support these statistics with methane release rates of up to 6.89 parts per million.  Isaac Santos at Southern Cross University is quoted as saying, “If it is leaking from the infrastructure that’s an easy fix.  If it is seeping from the soil that’s much harder to fix.”  This refers to the risk that hydraulic fracking so fragments the underlying sediments that gas seeps out of the soil in addition to at the wellhead.  Concern about this possibility is growing worldwide.

The world is experiencing the effects of a major natural gas disaster that has played out on a gas platform off the coast of Scotland.  The French company, Total SA, built the natural gas platform.  It has been spilling around 7 million cubic feet of natural gas everyday since its rupture in March of 2012.   Of course this spillage has not been widely reported as sensational since it is just the release of natural gas into the atmosphere and does not involve a visible oil spill with dead shore birds.  It is however, the global warming equivalent of putting another 300,000 cars on the road daily.  It also contributes to our worsening worldwide climate change.

Of course once again, the oil and gas industry is rushing forward to capitalize on our, industry created, present love affair with natural gas.  In fact, John Kerry our Secretary of State is quoted, while a Senator, as boasting, “We are the Saudi Arabia of natural gas.”  Our “ready, fire, aim” attitude, where there is no time for adequate study and there may be an industry/government agreement against it, may in fact be leading us to accelerate the negative impact of our existence on climate change.

Because issues about the value or harm of individual energy options are a very complex topic, it may require additional background.  I have included links below which describe the terms used with respect to natural gas and which answer a number of questions about the studies reported.

Use the following links to obtain more information:










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